Deutsche Börse’s journey to the cloud – an insider view

CIO and COO Christoph Böhm says moving to the cloud provides unique advantages — to those who can tap into them.
13 March 2020

Frankfurt Stock Exchange. Source: Shutterstock

Moving to the cloud yields many advantages, especially because there are no upfront costs and the technology itself is extremely scalable and agile.

In most instances, the transition of apps and data to the cloud is the first step to digital transformation — a major challenge in itself.

For organizations in the financial services industry, the move to the cloud isn’t simple. Data and apps are both bound by law and must meet specific criteria before being migrated.

In a recent conversation with McKinsey, Deutsche Börse’s Executive Board member, CIO, and COO Christoph Böhm explained how the company moved to the cloud, its obstacles, and what it learned.

“In our growth strategy, the cloud plays a major role as an enabler for other areas such as distributed ledger technology, automation, and big data.”

The organization, which facilitates the exchange of billions of dollars worth of financial instruments every month, decided to follow a multi-cloud approach.

The choice was made because it allowed them to reduce the risk of depending on a single provider and enabled them to optimize its portfolio by choosing the most innovative service providers for each of its applications.

“So we intentionally set up cloud environments at various providers and often let the development teams decide where to put their workloads.”

Böhm explained that teams made the decisions about their workloads based on which platform can best run a given workload, and the dependency on other applications, such as the need to share data among applications with certain latency requirements.

The company’s decision also meant that developers were given the flexibility to choose cloud environments based on their own team’s competency as well, which would directly impact delivery.

Obviously, being a major stakeholder in the financial services industry in Europe, the Deutsche Börse had to abide by strict regulatory requirements.

Böhm, however, explained that those requirements were uncertain because of the sheer size and function of the entity. Hence, the organization engaged in dialogues with various stakeholders in the industry to gain some clarity and avoid roll-out hiccups.

“Much has changed in the past few years in terms of discussing technological innovation with regulators.” 

An example that Böhm pointed towards was the recent update to Bank of England’s policy framework which gave regulated entities assurances about using cloud technology, and helped institutions gain confidence in using the cloud. 

“We expect this trend will only accelerate in the future,” said Böhm.

Having completed the move to the cloud rather successfully, there are lessons that the Deutsche Börse can teach. However, getting a good understanding of what the cloud is and isn’t is most critical.

“I’ve heard too many overly simplistic business cases that account only for cost reduction driven by IT infrastructure changes. These expectations are often not met, since the pure hardware cost benefits are typically not big enough.”

Böhm, who has worked with several vendors around the world, concludes by sharing that the potential of the cloud is significant — businesses that really understand it can leverage it for significant gains in ways only limited by their creativity and technology prowess.